How to tell where a euro note comes from - and why a German one doesn't beat a Greek

The eurozone debt crisis may be dragging the world back down into the mire, but for us Britons there is a tiny ray of light - the tide has turned spectacularly when it comes to buying our euros.

£1 now buys you €1.25 - 10 per cent more than this time last year. But every silver lining has to have a grey cloud, and some of the wilder speculation right now involves the suggestion that holidaymakers should be worried about holding Greek euros.

That's because, while the Eurocrats would have you believe that every euro note is equal, there is one tiny crucial difference. The little-known way to spot where they come from is a letter in front of the serial number.

French letter: Spotting where a euro is from means checking the letter just before the serial number - this one has a U and comes from France

It's hardly surprising that as forecasts hit fever pitch of Greece being bundled out of the euro, there was bound to be plenty of wild speculation – especially as the architects of the grand currency experiment didn't design it with an exit strategy.

The potential perils of where your euro is from is a classic 'a bloke told me down the pub' conversation.

But surely the whole point of this euro idea was that everybody has exactly the same money?’

And that is true. The euro is a common currency, entirely equal across all nations, and wherever your note comes from the design is exactly the same.

But there is a previously little-known trick to tell where they are from, which we at This is Money have highlighted before - and now many others will probably tell you about too.

Where do my euros come from?

But there is a crucial point for anyone considering being swept up by talk of Greek euro notes proving to be duds.

While we don’t know what will happen if a country drops out, thanks to that missing exit strategy, we can be fairly certain it won’t involve a small army of wallet inspectors marching around, checking the letters on your banknotes and taking them off you.

Beyond the fact that this is completely impractical, and probably breaks all kinds of elements of the European Human Rights Act, that's because notes from different countries end up all over the place.

Cancel a Greek euro note and you won't just be voiding the money in Greek's pocket, you'll be declaring some of those in the pockets of Germans, Italians, Frenchmen and even folks in Finland null and void.

How euro notes spread round the continent

Some quick pocket surveys, conducted by This is Money readers when I first wrote about how to work out where a euro note came from, reveal the extent of this effect.

One reader on the furthest westerly reaches of the Eurozone in Ireland had the following: five German, and one each of Greek, Belgian and Irish.

Another, in Greece, had four notes out of a Greek cash machine that read like the start of a bad joke: Two Germans, a Belgian and an Italian.

Meanwhile, we also conducted another test this week in the This is Money office. Richard Browning has luckily just bought €130 from our very own Arthur Daley, Ed Monk, on his return from an Italian holiday.

He has five Dutch notes, a Slovakian, a French note and a German.

Clearly, there are going to be a lot of Europeans and businesses out there, with assets that have no link with Greece, but a stash of notes with a Y on them.

If Greece does head back to the drachma, one way to make a bad situation worse would be to start randomly cancelling those notes – that makes it highly unlikely to happen.

What happens if Greece falls out of the euro?

The idea of Greek notes getting cancelled seems to have got its legs from the suggestion that if Greece left the euro, it would need a temporary currency to keep itself going.

In the absence of some Blue Peter-style preparation producing a stash of drachma notes they made earlier, the suggestion is that a system would be worked out to use euro notes as a substitute, somehow stamping them or marking them to identify them as no longer euros.

But that is not the same as cancelling all the euro notes in the country - because if you didn't use one as substitute drachma, it would not get stamped and would thus remain a fully functioning euro.

Get that note out of the country and it is still spendable - hence the recent signs of bank runs starting in Greece.

The best guess is that euro notes would remain as they are, and in order to iron out any problems with eurozone money supply, some would be gradually withdrawn.

If Greece does drop out, some form of controls would be likely to be brought in, freezing assets and stopping people from withdrawing cash in euros from banks, or transferring it our of the country.

What is extremely unlikely is that even in this instance, people in Greece would start having their euro notes confiscated off them. A nationwide shakedown of the cash in citizens' and tourists' pockets would risk sparking a major international incident.

Where Greeks would be hit is in their assets. Savings, investments, property values and all the important things that make up their wealth, would somehow be transferred back into drachma (most probably) and greatly devalued compared to their previous euro status.

In reality, no one knows what will take place. Mainly because the eurozone authorities seem to have decided that even admitting the possibility that a ten-year-old currency experiment could fail in any way, would be tantamount to triggering its decline.

That’s unfortunate for Greece, but fortunate for those who love a bit of spurious speculation.

So, those checking their pockets and finding a Greek Y in there should have no need to panic, unless they’re playing euro Top Trumps, of course.